This feels complicated! Can you help?

Embra_chap

Hello everyone,

I would really appreciate thoughts, observations or advice on my current situation please.

I am in the early stages of privately buying a house. So early in fact that I don't know the value but we think it will be in the region of £400k

I currently own a house which is worth £325k and I have £200k mortgage.

The situation is complicated because I will need to do some work in the new house (10-15k) before we can move in with our small children. I would like to lump in the 15k with my new mortgage. In parrallel to this I would be looking to sell the current place and hopefully wrap all of this up before winter hits.

How do I buy the new place and finance the work before selling my current home? I know this will go quickly as homes in our area are in high demand (hence the reason I'm so keen to follow up this private sale).

It feels like I need £100k up front to get a decent mortgage and pay for the work. I dont have £100k though.

I'm on a decent wage and can afford 2 mortgages for 6 months and potentially some interest from a loan but that's not sustainable long term obviously.

Does anyone have any suggestions? Thank you everyone

Thrugelmir

How much savings do you have towards the purchase of the new property?

Embra_chap

Very little. I have 10k in the bank that I can use if need be but not enough to make a dent on a deposit etc. I've just finished paying off our extension from 2 years ago (£70k) hence savings are low.

millysg1

Are you saying you want to buy the new house BEFORE selling your current house? And you have savings of £10k to put down as a deposit? If so, the only thing I can think is to remortgage your current house and take a large lump sum out but I still don't think that will be enough and I don't see a Bank giving you a second mortgage when your first would be very high with a low LTV. I could be wrong. im not an expert!

lindens

I would complete on your house and buy the new house, and rent for 6 months whilst the work is ongoing.

Embra_chap

Likelihood of a bank lending me £100k for 6 months? Kind of a bridging deal (do they still exist?).

m_13

I'm not sure why you are looking for £100k bridging loan when really you want £415k (to buy house plus do work). Where will the other £315k come from if you get a bridging loan for £100k?

Embra_chap

Thanks all for your input.

In my head I reckoned on securing a £100k loan/finance to allow me to negotiate a better mortgage rate. This would be paid back once the sale of the current property went through (3-6 months).

Am I looking at this all wrong?

thanks again.

m_13

I honestly don't think that debt will help you get a better rate particularly under MMR which seems to be extremely interested in your outgoings and the future affordability of the mortgage. A bridging loan allows you to temporarily own two properties but it's extremely expensive. If houses in your area are selling quickly would your home not sell quickly too?

AFK_Matrix

The house you want to buy and do work on, is it livable? I.e can you move in and do work as you live there? If there is no kitchen or bathroom I belive your not going to get a mortgage anyway as it's classed as unlivable and no lender will give you a mortgage.

If it is just redoing what is there but what is there is usable etc then you may have to buy the place the normal way and then use your 10k or a loan etc to do the work and do it room by room or bit by bit while you live there.

Embra_chap

That would be my preffered scenario but one that won't be played out.

There is cosmetic work needed plus some small peices of building work I envisage. We built the extension on the current house with 2 small chidren in situ and it was hard work (having to move out for 6 weeks too). I now have more kids and a small baby.

Living amongst the work isn't viable i'm afraid

I do appreciate the input.